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Is trading penny shares riskier than currency trading? This is a hard question to answer. Personally I think they are too different to say which is riskier. Currencies are often traded on margin. Some currency brokers actually allow leverage up to 500:1. This amount of leverage can very quickly blow an entire account.

Penny stocks can move very rapidly and also eat into a trading account.

One big advantage of currencies is you can very simply choose how much leverage you want to use. If you have an account size of ,000. You can simply place trades that equal your ,000 or borrow money.

One advantage of currencies is that there are no trading commissions. With stock trading you usually have a set fee for a each trade. Many penny stock brokers also charge additional fees for trading penny stocks. This can mean you have to earn high returns just to pay the greedy stock broker their fees.

If you trade forex with many retail forex brokers, they do not charge commissions. They make money with the bid/ask spread.

Trading both penny shares and currencies is highly risky. Be sure to take your time when choosing a broker. For stocks a good discount stock broker is often best suited. For currencies a good solid retail broker with a good reputation and low spreads if often the best.

Be very careful with currency brokers though, they are often not heavily regulated and they have been known to go bust before. You may have heard of the broker refco, they went bust a few years account. Many account holders lost all of their money.

One thing you can do is try a demo stock trading account before trading a real account.

Think of how bad it would be if you lost your entire trading account because of your broker going bankrupt!

 

 

Tags: penny stock brokers, stock broker, stock trading, trade stocks, trading